Bill Ackman: The bullish market will continue in 2021

With $ 13.1 billion in assets under management, Pershing Square Capital Management is by far not the largest hedge fund, but its moves and results usually attract considerable attention. This is due in part to the fact that his boss Bill Ackman has never strayed from the spotlight.

He often shared his ugly opinions about the market, the economy, the sectors and the individual securities. In an interview with Interactive Investor last month, Ackman shared his latest views on the economy and the market, as well as his forecast for 2021.

Although things have improved significantly since the initial downturn, the economy is still volatile. According to Ackman, a more stable economic base is seen:

“So I think you’ll see a pretty fast recovery that starts somewhere in late Q2 and continues through Q3, Q4, a low-interest environment, a ton of savings to be used. It can be quite beneficial. ”

In terms of asset classes, Ackman has long been a proponent of stocks against bonds. Based on his last interview.

“I am not in favor of buying bonds of any kind at current interest rate levels. “

A review of modern financial history demonstrates quite emphatically that, by comparison, there has rarely been a time when bonds have outperformed stocks. With interest rates close to zero likely to remain there in the near future, it is difficult to see much appeal in the bond market in 2021.

He also believes that last year’s unprecedented government intervention in the corporate bond market has added new layers of uncertainty to the asset class. Stocks may be slightly overvalued compared to historical norms, but they are still the best alternative.

After a brief correction this spring last year, the stock market came to life. The S&P 500 rose an impressive 16% in 2020. The Nasdaq index did even better, rising 43.6% amid rising technology stocks. According to Ackman, investors should expect more from the same in 2021. He believes that investors can still find good deals, especially among companies that have taken the necessary measures to reduce costs during the downturn:

Many companies and even entire industries have been forced to contend with unprecedented shocks to their core business over the past year. Those who responded to the crisis quickly by cutting costs may be in a good position to succeed in 2021, especially compared to companies that responded more slowly. Ackman seems particularly enthusiastic about some of the names in the hospitality industry, including Hilton Worldwide Holdings Inc. (NYSE: HLT), part of the Pershing Square portfolio.

2021 will certainly be interesting for the markets. If the global economy can achieve a sustainable recovery, as Ackman expects, the bullish market must be able to continue to move. At the same time, however, the signs of the recent crisis cannot be ignored.